AkzoNobel has implemented an ambitious strategy designed to transform our business and enhance shareholder value. This long-term plan, initiated some years ago, culminated in 2007 with two major transactions.
First, we reached an agreement to divest our pharmaceutical business (Organon BioSciences). Soon after, we acquired Imperial Chemical Industries plc (ICI).
Thinking ahead
Before 2007, we had created the platform for this transformation by streamlining our portfolios – particularly in Chemicals. This improved our operational results, enhanced our capital structure, and established our leadership position in creating value through sustainable business.
A platform for growth
The new organization operates in three business areas: Decorative Paints, Performance Coatings, and Specialty Chemicals. We’re now focusing on maintaining our momentum and leadership through faster growth (particularly in emerging markets). We’ll take advantage of our global leadership positions and continue to improve our profitability through operational excellence. In particular we’ll gain the full commercial benefits of the ICI acquisition.
We aim to create one of the world’s leading industrial companies with a unique brand. We have a strong portfolio of businesses in attractive growth markets and we remain committed to financial discipline. We’ll invest capital to build sustainable leadership positions, aiming for returns significantly above the cost of capital and substantial operational cash flows.
Paints and Coatings
Akzo Nobel is the world’s largest manufacturer of decorative paints and performance coatings. We supply products to a broad spectrum of customers – from heavy industrial to consumers.
The industry provides strong, stable and sustainable cash flows with low cyclical movements and modest capital investment requirements.
We’re focused on:
- growing in the emerging markets of Asia, Eastern and Central Europe, and South and Central America, through a combination of organic growth and selected acquisitions
- strengthening our position in key mature markets, mainly through small and medium-sized acquisitions.
Our ambition is to consolidate our world-leading position in Decorative Paints and Performance Coatings in all our product markets and key geographic countries and regions. We intend to be an active consolidator in the industry and continue to use our scale to further develop our leading positions in technology and sustainability.
Specialty Chemicals
Our Specialty Chemicals portfolio focuses on a small number of businesses with leading market positions. Overall, the business is similar to Paints and Coatings in offering relatively stable and sustainable cash flows from a less cyclical base and with average investment demands.
Having realigned the portfolio, our Specialty Chemicals activities are now fully concentrated on profitable growth in those markets where we have a competitive advantage – and can achieve above-average financial returns. We aim to strengthen our leading positions by investing in organic growth, particularly in the emerging markets, and through participating in industry consolidation.
Across the portfolio, we’ll continue to scrutinize our activities in mature markets for opportunities to improve productivity.
A well-balanced portfolio
The basic business models of our business areas are now very similar, so we can make best use of our scale and size to create value. We’re creating, modifying, and using chemical compounds in all the business areas in which we operate.
This common thread gives us a technical edge, so we continue to develop joint research and development programs in similar technologies. For example, the cellulose-based thickeners developed by our Cellulosic Specialties business are used in our decorative wall paints. The surface properties of our coatings are also improved by using colloidal silica produced by our Pulp & Paper Chemicals business. Both examples highlight the increasing collaboration between our coatings and chemicals activities.